Do Bancrofts Need a Don Corleone to Get Dow Jones Deal Done?

By: Joe Strupp

Has Rupert Murdoch made the Bancroft family an offer they can’t refuse? Is it just business — or personal? Time will tell. But if Don Corleone ran the Bancroft family, chances are none of this hesitation would prevail. He would gather together the offspring and tell them why, or why not, selling to Murdoch is the way to go. The decision would be made. Cheeks kissed. Fade to black.

Forget any grandfather clauses. They might need a Godfather clause.

Dissenters, like Christopher Bancroft, who has been out trying to find alternative buyers for his family’s prized jewel, would no doubt face the same fate as Fredo Corleone. Okay, no shot in the back of the head on Lake Tahoe, but at least a stern directive, “don’t ever go against the family again.”

But, of course, this is no mob family. But more importantly, this is today’s newspaper family, which is slowly disappearing and is splintered more and more.

In the past, newspaper families, which were more common, were almost always more business oriented, if agreeable. Of course, the ruling generations bickered, fought, and sometimes even got physical in their disagreements. But the papers carried on, sometimes without one faction or another, and passed on to the next generation.

In recent years, of course, that has changed dramatically. Because of both the economic downturn in the industry that has sparked many families to get out, and the disinterest by younger factions in continuing the trade, more and more bickering is common.

When the San Francisco Chronicle was sold more than a half dozen years ago to Hearst, the Thieriot and de Young families, whose ancestors launched the paper more than a century earlier as teenagers, had long, drawn-out disagreements over its sale, which eventually occurred, but not without intricate negotiations.

Around the same time, as the Chandlers of Los Angles Times fame agreed to hand over control of their beloved TimesMirror to Tribune, the change was orchestrated to keep several family members involved via the Tribune Board of Directors, a piece of power that later affected the eventual ownership change of Tribune.

Not all newspaper family ownerships end with a sale, however. Take Freedom Communications’ Hoiles family of Orange County. When family squabbles threatened a sale of that long-held company that owns the Orange County Register, an arrangement was struck to allow the fourth-generation group that wanted to remain in control to do just that, although leaving some factions who wanted to sell a little miffed.

And while the Sulzbergers who control The New York Times appear to have no plans for a sell-off anytime soon, recent shareholder meetings show that Arthur Sulzberger Jr. is under more pressure to produce, and grow, than his father or any previous family leader. Recent cutbacks and the sale of its television properties shows the money crunch is growing.

Then there are those like the Blethens of Washington and Maine, who have taken their opposition to the Estate Tax, blamed by many rightly or wrongly for forcing newspaper families to sell out, to a national crusade, recently announcing once again plans for a “Death Tax” summit in Washington, D.C. this fall aimed at ending this decades-old fee. Seattle Times Publisher Frank Blethen has made no secret that the tax is a thorn in his side as he plans to hand over his company to younger generations, some of whom are already involved in the family business.

Still, one of the ongoing realities of this business is that family tradition is giving way more and more to demands of the market and, well, family differences. One hundred years ago, when a family owned a daily, or many, it was a few brothers, and sisters, or maybe just a true mom-and-pop duo running the show. Now, with often third and fourth-generations involved, and cousinly shareholders running in to the dozens, keeping everyone happy, and profitable, is all but impossible. Add in the continuing economic problems of the biz and it is no wonder some want out.

But in the case of Dow Jones, and of course, The Wall Street Journal, the proverbial rock and hard place loom large. No one in the family wants to see their beloved properties ruined by Murdoch, or anyone else, in the name of sensationalistic change or bowing to the assumed masses. On the other hand, those opposing Murdoch would likely rather have his $5 billion than a stock plunge, or future profit downturn, that is likely if they pass on the offer.

Even Christopher Bancroft may well see that the financial elements of this most important of family meetings outweighs the tug of the heart, or even fears of journalism ethical breaches.

Murdoch, of course, is no stranger to family tugs and turns, having seen his sons, Lachlan and James, weather the ups and downs of life in News Corp. Lachlan obtained and later lost his place as publisher of the New York Post under daddy’s directives, while brother James has seen several titles come and go, with speculation that he is seen as an heir apparent.

Still, Murdoch remains able to command decisions for his family business more than most, given its worldwide holdings and vast wealth. But even he knows the day will come when his youngsters, not to mention his wife and young daughter, will be in the throws of similar family differences and decision-making.

For the Bancrofts, who may be one of the last of a dying newspaper breed, their upcoming decision may well be a decision on the future of newspaper families in general. In the end, they may find, Murdoch has made them an offer they can’t refuse.

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